Strategy Sells $395M in Bitcoin to Fund STRC Repurchases and Build $4B Cash Reserve

Strategy, a publicly traded company, has sold $395 million in Bitcoin to fund its STRC preferred shares repurchases and build a $4 billion cash reserve. This move marks the highest annual selling volume since Strategy began its Bitcoin strategy in 2020.

The company sold 1,638 Bitcoins between July 27 and August 2, generating $104.7 million in proceeds, and issued approximately 3.01 million shares of MSTR common stock, raising $290.6 million. Instead of using the funds to buy more Bitcoin, Strategy used them to pay preferred stock dividends, repurchase STRC shares, and expand its cash reserves.

The company's cash reserves have increased from $2.55 billion at the end of June to $3.75 billion on July 26, and now stand at $4 billion. This move aims to mitigate a key risk for Strategy: it doesn't need to sell assets or issue additional securities to meet short-term debt and interest obligations during unfavorable market conditions.

Strategy's decision has been met with some criticism from Bitcoin bear Peter Schiff, who commented that the company is increasingly relying on selling Bitcoin and issuing more MSTR to prioritize the interests of preferred shareholders. However, Strategy's President and CEO, Phong Le, stated that repurchasing STRC below par value allows the company to settle future dividend obligations at a discount.